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House prices predicted to rise as optimism grows

House prices predicted to rise as optimism grows

Category: Mortgages

Updated: 13/06/2011
First Published: 13/06/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Confidence in the property market appears to be growing after more Britons said they expect house prices to rise rather than fall over the next 12 months.

Even though prices fell in April, one in three (33%) people questioned by Halifax believe prices will rise this year.

Just under a quarter (23%) are expecting prices to fall.

Despite the optimism, the majority still think that any house price movement over the next year will be relatively small.

More than half (57%) expect any change to be between +5% and -5%, while a further quarter (26%) think prices will remain the same.

Although exactly half of those surveyed think it would be a good time to buy over the next three months, the economic uncertainty is expected to keep the shackles on demand for property.

Concerns over job security was found to be the biggest barrier to buying a home, with other potential headwinds facing home buyers including household finances and fears interest rates could soon rise.

Also putting many people off attempting to enter the property market is the size of the deposit believed to be needed to put down on a property.

Although over a quarter (27%) thought that the general availability of mortgages was one of the main obstacles to buying a property, the latest research from suggests the situation might be improving.

While the number of first time buyer mortgages available has increased, the average cost of the deals has been falling.

There are currently 183 mortgage products available for first time buyers to choose from, compared with just 62 which were on the table in June 2009.

Of the 183 products aimed at first time buyers, 31 are available to those with just a 5% deposit, up from 19 at the same point last year.

In addition, the cost of such deals has been coming down of late.

The average first time buyer rate today is 5.22%, down from 5.37% a year ago, and 5.63% in June 2009.

"As well as high mortgage rates, many borrowers have found it incredibly difficult to find funds for large deposits, often entirely beyond their financial capabilities," said Louise Holmes, spokesperson for

"Higher loan-to-value mortgages have made a return to the market over recent months, suggesting lenders are taking positive steps to help the first time buyer market."

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